Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes

Of course when it comes to such a prohibition, the devil is in the details. "Certain activities may not be prohibited depending on the facts and circumstances". As we head into a new election season, it is worth looking at some of those devilish details.

The IRS is required to jump through extra hoops before it can open an audit on a church. And churches are not required to file Form 990. When it comes to politics, though, churches are held to the same standard as other 501(c)(3) organizations. Churches that endorse candidates or engage in political activity can lose their exempt status.

IRS Damned When It Does And Damned When It Doesn't

The Alliance Defending Freedom is very upset about that rule and has started a movement called "Pulpit Freedom Sunday". In 2014, over 1600 pastors made election speeches and sent tapes of them to the IRS more or less daring them to do something about it. The IRS response was underwhelming enough to spark a lawsuit by the Freedom From Religion Foundation, which they withdrew after the IRS somehow convinced FFRF that it would not remain supine on the issue.

According to the GAO the IRS committee charged with considering whether churches have violated the rules about political activity received 501 referrals in the 2014 fiscal years. It is unlikely that the IRS will do much about many of those, but still, I'm not supposed to giving out advice based on the audit lottery and there actually is some pretty specific guidance on what constitutes prohibited political activity for not for profits, with some of the advice specific to churches. Well in advance of the 2008 election the IRS issued Revenue Ruling 2007-41 to give numerous examples of proper and improper political activity. Here are some of the high points.

Can Your Preacher Tell Who To Vote For?

Actually she can. It just depends on where, when and how. Here is the example in the ruling.

Minister C is the minister of Church L, a section 501(c)(3) organization and Minister C is well known in the community. Three weeks before the election, he attends a press conference at Candidate V's campaign headquarters and states that Candidate V should be reelected. Minister C does not say he is speaking on behalf of Church L. His endorsement is reported on the front page of the local newspaper and he is identified in the article as the minister of Church L. Because Minister C did not make the endorsement at an official church function, in an official church publication or otherwise use the church's assets, and did not state that he was speaking as a representative of Church L, his actions do not constitute campaign intervention by Church L.

Pope Francis boards his flight to La Habana, Cuba, where he will start a 10-day trip including the United States, at Rome's Fiumicino international airport, Saturday, Sept. 19, 2015. (AP Photo/Riccardo De Luca)

To take a much more extreme example Mike Figueredo of The Humanist Report has suggested that given how enthusiastic Bernie Sanders is about Pope Francis, maybe Pope Francis should return the favor with an endorsement.

On a more mundane level, it is clear that ministers and the like can endorse candidates if they can make it clear that they are acting in their personal capacity. An interesting thought experiment would be whether a bumper sticker on a personally owned car, for which the minister receives mileage reimbursement that is parked in a reserved space at the church would cross the line.

What About Candidates Speaking At The Church?

It is all a matter of being even handed. If all the candidates for the same office has equal access and the church does not endorse any of them that can be OK, although there are enough nuances, that I would get a little nervous about it.

In determining whether candidates are given an equal opportunity to participate, the nature of the event to which each candidate is invited will be considered, in addition to the manner of presentation. For example, an organization that invites one candidate to speak at its well attended annual banquet, but invites the opposing candidate to speak at a sparsely attended general meeting, will likely have violated the political campaign prohibition, even if the manner of presentation for both speakers is otherwise neutral.

The ruling provides an example of unequal access.

Minister F is the minister of Church O, a section 501(c)(3) organization. The Sunday before the November election, Minister F invites Senate Candidate X to preach to her congregation during worship services. During his remarks, Candidate X states, "I am asking not only for your votes, but for your enthusiasm and dedication, for your willingness to go the extra mile to get a very large turnout on Tuesday." Minister F invites no other candidate to address her congregation during the Senatorial campaign. Because these activities take place during official church services, they are attributed to Church O. By selectively providing church facilities to allow Candidate X to speak in support of his campaign, Church O's actions constitute political campaign intervention.

Can Candidates Still Go To Church?

Of course, candidates can go to events sponsored by organizations - like church services - without that constituting an endorsement, but if the candidate is recognized by the organization, the line can be crossed. There were no church examples under this section, but this one illustrates the principles pretty well.

Mayor G attends a concert performed by Symphony S, a section 501(c)(3) organization, in City Park. The concert is free and open to the public. Mayor G is a candidate for reelection, and the concert takes place after the primary and before the general election. During the concert, the chairman of S's board addresses the crowd and says, "I am pleased to see Mayor G here tonight. Without his support, these free concerts in City Park would not be possible. We will need his help if we want these concerts to continue next year so please support Mayor G in November as he has supported us." As a result of these remarks, Symphony S has engaged in political campaign intervention.

What About Issue Advocacy?

This is probably the stickiest area.

Even if a statement does not expressly tell an audience to vote for or against a specific candidate, an organization delivering the statement is at risk of violating the political campaign intervention prohibition if there is any message favoring or opposing a candidate.

When the IRS issued proposed regulations to clarify this for social welfare organizations (501(c)(4)), it received more than 150,000 written comments, more than for any other proposed regulation. As of Apirl 17, 2015, it was still pondering.IRS Commissioner John Koskinen has indicated that they might not get back to them before the 2016 election.

Among the facts and circumstances considered are whether statements mention particular candidates, are delivered close in time to an election or makes reference to voting in an election.

There Is More

The ruling also discusses website links and charging for the use of facilities. Generally, the key is to be even-handed. Get out the vote activities are fine unless they are clearly designed to get out a certain type of vote.

Given the hangover from the interminable IRS scandal - on Day 863 by TaxProf count - as I write this the IRS is probably not going to pay much attention to churches that accidentally wander into some of the gray areas. I would expect that if IRS actually starts handing out revocations it will be for something pretty blatant. Personally, if I was in charge, I'd send out 1,600 or so to call the Alliance Defending Freedom's bluff.

“Indeed, it appears that Sen. Cruz chose Liberty because it offered him certain advantages, and Liberty was more than happy to work in coordination with the senator to assist his cause,” observed Lynn in his letter to Koskinen. “Sen. Cruz wanted potential donors and conservative voters to believe that he has the support of thousands of young people at the largest Christian university in the world. And Liberty helped sell that idea by making attendance at the senator’s rally mandatory for students. (In fact, anyone who failed to show up without an approved excuse faced a fine of $10.)”

I believe it would be detrimental for our country and the democratic process to go through another election cycle with the ‘no-politicking’ rule unenforced. The more the IRS delays, the more organizations like Liberty University and the churches that follow the advice of the Alliance Defending Freedom conclude that they do not have to abide by our nation’s laws

I think that Americans United is going to remain disappointed with the IRS, through this next election cycle, but Liberty is probably prepared to defend itself as it just recently had Bernie Sanders speak at one of its convocations.